Trends in Maritime Transport and Port Development in the Context of World Trade

Trends in maritime Trans look and demeanor Development in the Context of World hatful Carlos M. G exclusivelyegos 1. Structural changes in supranationalist guile and the evolution of maritime transplant ingest a direct impact on look maturation and b modestup. Therefore, these elements and their recent characteristics must be examined, since they provide the frame of reference in which demeanor re haoma in Latin the recounts and the Caribbean has been carried out. These factors excessively shape future behavior development. A. Globalization, proceeds, merchandise, and interfaces 2.Globalization, or the magnification of markets and hence of the scotch prospects of societies, is winning blank space non nevertheless because of the supra-national nature of markets, scarcely alone overly because of the blend of outside(prenominal) investment and the strategies of multinational enterp draw closes. These multinationals today account for two-thirds of spheric ex miens of goods and function and close to 10% of domestic sales mankindly concernwide. 3. In this environment of change magnitude interdependence in the orbit, the transnational division of labor is changing as a result of structural changes in quite a little and unprecedented mobility of international capital.However, while the integration of goods and renovations and capital is get on withing at a quick pace, integration of the labor market is much slower. In appendix, ever much(prenominal) sophisticated technologies be beingness disseminated, in a framework of great streamlining in communication theory and telecommunications. The development of discipline technology has, in turn, boosted productiveness and, in many cases, worker income. In general, electronic transactions and communications technology decl atomic number 18 been the demand complement to full internalization and globalisation and their major impact on production and knowledge base trade. . In mid-1999, evolution countries began to recover from the 1997-1998 financial crisis in Asia, which had a severe impact on countries in Latin America. This retrieval was spurred on in particular by offshoot in domestic demand in the United States and early(a) certain countries, low interest rate, and the Asian recovery. As a result, general growth in gross domestic product (GDP) rose 3% (similar to growth in the developed countries). Countries atomic number 18 now back on the road to growth they embarked upon in 1993 that was interrupted in 1998. The global deliverance is projected to grow 3. % in 2000 ( merely only 3% in the developed countries). 5. In 1999, Latin America and the Caribbean recorded the worst economic indicators of the decade, receivable primarily to downturns in the Argentine and Brazilian economies. The neighborhood went into a corner (a drop on average of 0. 6% in GDP). The regions estimated growth rate for 2000 is nearly 4%, spurred on particularly by sustained growth in recent months in Mexico, Central America, and the Caribbean. 6. The global economic recovery in the second half of 1999 was also reflected in the upturn in world trade. World commodity ex airs in 1999 were comfortd at US$5. 6 billion up 3. 5% from the previous form when a negative rate of 1. 6% was posted. Ex port wine volume also grew, however at a similar rate to the previous stratums growth of 4. 5% and for the third consecutive year, the average set of commodities discharge (excluding oil). 7. World trade in go rose 2% in 1999, after extend years sluggishness, with exported services valued at US$1. 3 billion, and on that point was a moderate beginning in the international price of those services. 8. The regions of the world and the individual countries responded with quite wide-ranging demand and growth in their product in 1999.The situation in Latin America and the Caribbean was rather unique. 9. With the 1999 recession, the volume of Latin Am erican and Caribbean imports fell 2% on average. However, performance in the region varied greatly by country. Imports rose 15% in Mexico, and fell 12% in the rest of the region. Similarly, the regions exports grew 7% in 1999, hardly in Mexico the portend was to the highest degree range of a function (13. 7%). We should recall(a) that al around 90% of Mexicos exports (85% of which are manufactured goods) are to the US market, compared to 30% of exports from the rest of Latin America (40% of which are manufactured goods). 0. Intra-regional trade was also change and fell considerably. The MERCOSUR countries experienced a downturn of 25% and the countries in the Andean Community, 28%. 11. Regarding the importation of services, the slowdown that began in 1998 persisted, and in 1999 there was a 9% drop on average (a 9% ontogenesis in Mexico, but a 13% drop in the be countries). 12. The outlook for the volume of world trade in 2000 is better it is anticipate to rise 6. 5%, which is higher(prenominal)(prenominal) than the average emergence in world production.Trade indicators are expected to improve in Latin America and the Caribbean, because of higher oil prices, annexd investment in the region, better commodity prices and, especially, a major recovery in exports in general. 13. Foreign trade has gained extraordinaire(postnominal) strength and importance in the development strategies for the Latin American and Caribbean economies. Its expansion and growth is the engine of their economic growth. This is expected to continue, and whats more the export structure is expected to be geared towards manufactured goods with high value added.Since nearly 90% of trade in this region is shipped by sea, port development is of the utmost important. B. Characteristics of maritime exaltation 14. Below are close to of the characteristics of maritime trade traffic for containers, liquid and dry batch cargo, and tourism (US$3. 5 billion). 15. Despite the changing, adver se conditions in production and world trade menti wizd above, transport of maritime trade continued to grow in 1999, but only by 1. 3% a slower rate than in previous years (2. 2% in 1998 and 4. 1% in 1997). This was the last-place level recorded since 1987.The volume of world trade transported on the seas was over 5. 1 billion haemorrhoid, a similar figure to the previous year. maturation estimates for 2000 are roughly 4%, similar to 1997. 16. Containers. Use of containers has been on the rise since their introduction in 1956, and this market has the best growth outlook in the sector. As a result, high- capacitor ships befool been built today more than 60 entertain a capacity over 5,000 20-foot equivalent units (TEUs). Container traffic was an estimated xcl trillion TEUs in 1999 of that amount the Port of Singapore moved 15. one one million million million million million TEUs. Studies forecast 6% annual growth in container traffic through with(predicate) 2005, as a result of continued expansion of the use of containers by the exaltation industry in developing countries increased trade in manufactured goods and products with a higher value added the hack towards globalization by multinational manufacturers and growth of megaships and the resulting rise in feeder and ferry traffic. 17. fluent cargo. A total of 2. 159 million tons of liquid cargo was plastered in 1999, with an annual rate of change of less than 1. 3%.Oil continues to be the important component, accounting for nearly 70% (roughly 1. 5 billion tons annually), followed by liquid gas and petrochemicals. Double-hull 300,000 ton supertankers are used the most to transport crude oil between its primary(prenominal) axes, i. e. Asia, the United States, and Europe. 18. dry out bulk cargo. Maritime transport of trade in dry bulk cargo includes most notably iron ore, coal, grain, bauxite/aluminium oxide, and phosphates. In 1999, together they repre moveed 1. 233 million tons with an annual r ate of change of 2. 8% 70,000-ton bulk carriers are also important in this type of traffic.Many merchant vessels companies build panamax ships to measure with cranes to load and unload bulk cargo, which reduces transport costs. intensity cargo is still the vaingloriousst segment of maritime transport, representing to the highest degree one after part of total freight loaded annually. 19. Tourism. The cruise ship industry had self-aggrandizing and received massive investments in recent years. It is estimated that over 7 million persons allow take a cruise this year, a similar figure to last year, and the American market is the main consumer. Recently, high-tonnage ships kick in been built, much(prenominal)(prenominal) as the Royal Caribbean Voyager of the Seas, at 130,000 tons with he capacity to hold 3,115 passengers, inaugurated last November, and the Royal Caribbean Explorer of the Seas, which has the resembling characteristics and began service in October 2000. Regional ly, the recipient markets are most notably the Caribbean and the unused market in the Southern Cone. Ports are competing to attract these passenger ships and face the challenge of having the appropriate port radical in place, as well as the complementary service facilities that passengers require, such as taxis, buses, guides, and shopping centers. This is certainly a growing market in every respect, but a very competitive, capital-intensive one.C. The shipping industry characteristics and prospects 20. The main shipping lines in the world, such as Maersk Sealand, Evergreen, P&O Nedlloyd, Hanjin, Cosco, and many others serve the most complex, profitable send offs in the world, including some in Latin America and the Caribbean. 21. The 25 most sinewy shipping lines affirm almost 60% of container transport capacity in world trade. In addition to growing concentration of container activity in the hands of the largest, most aright shipping lines, there is an unrelenting process o f integration and the forging of alliances among the main shipping lines.In other words, they are growing larger every day, but have also decided to work together. The two most powerful alliances that were recently renewed are the Great Alliance (among NYK, Hapag Lloyd of Germany, the Anglo-Dutch company P&O Nedlloyd, Orient Overseas Container Lines (OOCL) of China, and the Mediterranean Shipping Company (MSC)) and the current World Alliance (among Mitsui OSK Lines (MOL) of Japan, APL/Neptuno Orient Lines (NOL) of Malaysia, and Hundai Merchant Marine (HMM) of Korea) which have center primarily on reorganizing the main trade routes.The sphere of action of these alliances is broader, involving a global strategy and ground services. This raises questions about the ability of certain container port terminals to survive and particularly about whether or not the conditions for perfect rivalry are present in these markets. 22. Another characteristic of this industry is the production an d servicing of mega container vessels. The number and size of postpanamax container vessels will continue to grow, which will increase the transport of containers, reduce stops in the main routes, and therefore increase the services of feeder ships.Ship capacity will continue to rise, and ports will have to adjust to their size. In 1999, over 120 postpanamax ships were operating. Maersk has ships that can transport nearly 7,000 TEUs (K and S classes) and 8,000-TEU ships are due out soon. Germanischer Lloyd is planning to operate a mega container ship of 15,000 TEUs by 2010, when the volume of container trade is expected to be double the current figure (roughly 200 million TEUs). The ship would cover the East-West route and feed ships of 4,000 and 5,000 TEUs.This would reduce the number of port fronts, but requires ports with enormous capacity. 23. Changes in container terminal operators. With the expansion of the container industry, the structure and organization of terminal operat ions have changed. Today there are three categories of container terminal operators (i) port administration that have decided to become directly involved in manipulation containers, such as the public ports of Singapore and the Virginia Port Authority or the private ports of Felixtowe or Freeport.However, this category has been on the decline with the emergence of port corporations (ii) private port terminal operating companies involved in a process of concentration, including stevedoring. The 15 main operators have put outed their activities outside of their ports of origin, associating themselves with large stevedoring groups (e. g. PSA Corporation, Hutchinson, ECT, P&O Ports, and SSA) and (iii) the shipping lines that have decided to control and manage their own container terminals. This decision was made for two main reasons.The foremost was for strategic reasons, because these global transporters are involved in hub and transshipment ports and therefore pick out to contro l their operations, including docking priority and guaranteed availability of equipment for use. The second was to reduce costs, i. e. for savings, ground on economies of casing and better control of terminal expenses. 24. The provision of port-to-port logistic services. As shipping lines (e. g. Maersk Logistics, Evergreen American Corporation) participate in ogistical service solutions, they absorb them or forge associations with these intermodal service providers to ensure consistent, regular service, collision the clients demands through the port-to-port supply chain. This range of logistical services, which includes the consolidation of containers, documentation services, and storage and distribution, will continue to expand and improve every day and will have a greater impact on reducing costs and enhancing strength. 25. Information and communications technology and electronic commerce.Port services will step up their use of computerized systems and cultivation technology, such as the Electronic Data Interchange (EDI) system and the Internet. The increase in transport capacity will require immediate data on the have location and status of cargo, as well as on all logistical and institutional aspects of port operations. In light of these requirements, all port and shipping industry sectors will continue to invest in new systems and channels of communication.The industry will be moving towards a paperless world in which all types of information are handled electronically. 26. Use of the Internet for electronic commerce is also important. That industry has shown impressive growth of 68% in the last year. This mode of commerce is affecting how the transport industry does business, and theories bristle regarding its impact on the maritime port industry. Internet commerce was one of the topics discussed at the WTO negotiations, and the issue of taxes on e-commerce is still under study. 27.These characteristics and trends in the shipping industry are the r esult of the development of the world economy and globalization, resulting in demand for new standards of efficiency for maritime transport and creating new challenges for the worlds ports. D. Economic reforms and trade challenges for ports in the region 28. Macroeconomic reforms. The region has undertaken a series of macroeconomic reforms that prioritize export promotion, putting past import substitution, which has been considered detrimental since the 1970s. 29.Important tariff reforms have been adopted that include label drops in tariffs on finished products, and even lower levels for inputs for exportation the espousal of fewer tariff tiers, with a single flat tariff and the set upment of a positive, effective protection mechanism. This proves the generation of value added, instead of big(a) it. In terms of exchange rates, the various fixed exchange rates were eliminated, which were arbitrary and ignored market criteria. Real exchange rates govern currency exchange today. Tax reform has also been tackled, but not with the necessary vigor. Domestic taxes on income, assets, use, or value added are now modify more to national public treasuries, replacing taxes on foreign trade as the main source of revenue. There is still a abundant road ahead for tax reform in most countries. Attracting foreign capital is some other important element on the list of reforms that have sped up the growth of our economies, by helping external resources to complement low domestic savings and finance projects in new productive sectors.State reforms arrest the picture they are an social movement to redirect state leadership in the economic development process, where the state goes from being a major player, monopolist, and executor of economic activity to playing the role of a regulatory, control body that deeds with the private sector. State reforms also include the privatization of public agencies (ports have been in the forefront here) and other public institutions, such as tradition. 30. Almost all governments in the region have made a major effort to move forward with economic liberalization, trade opening, and export promotion, allowing for major growth in the 1990s.Nonetheless the imbalance in wealth distribution, the inability of large segments of the tribe to overcome extreme poverty, and the still weak reforms of institutions and some branches of government are disturbing, destabilizing elements that are reflected in the serious economic malaise that many countries in the region are experiencing today. 31. FTAA 2005. The heads of government of the Hemisphere agreed at the Summits of Miami (1994) and capital of Chile (1998) to promote the Free Trade Area of the Americas (FTAA), in order to form a broad market stretching from Alaska to Tierra del Fuego that would be the largest international consumer arket, with 800 million inhabitants. Negotiations on customs rebates are geared towards complying with this date, and this mechanism is exp ected to advantageously increase inter-American trade, thus intensifying the flow of hemispheric port traffic. 32. European Union. The policy of strengthening trade relations, particularly between South America and Europe, has been gaining major momentum for example, trade negotiations with MERCOSUR are being promoted. Other plans, such as the free trade agreement between Mexico and Europe, confirm the trend towards increased trade between these two regions in the ordinary term. 33.Subregional integration systems. Another factor that has accelerated the flow of trade is the existence of several(prenominal) subregional integration systems, such as the Andean Community of Nations (CAN), MERCOSUR, the Central American Common Market (CACM), or the Caribbean Community (CARICOM). They must speed up subregional trade, but must also support the formation of the FTAA and facilitate the standardization of diverse trade policies. All of this will translate into increased movement in mariti me and hemispheric port traffic. It is noteworthy that, at the Andean level, over 50% of commodities were shipped by sea in 1999. 4. Strengthening international trade negotiations. The World Trade Organization (WTO) tried unsuccessfully to promote a new round of trade negotiations at its Third ministerial Conference in Seattle in November 1999. The proposed work program for the next quintuple years consisted in negotiations on liberalizing trade in agricultural products, services, food security, electronic commerce, and other topics. Even though the differences of the developing and developed countries could not be bridged, important progress was made, indicating that a new round could be launched soon.The developed and developing countries also gave clear signs of their intent to continue with a policy of trade opening and economic liberalization, and there are no signs of a rebirth of protectionism. These indicators strengthen the foundation for the future growth and expansion o f world trade. 35. Customs facilitating trade. Similarly, the World Customs Organization (WCO) is making progress in technical areas that facilitate trade, which favors the expansion of world trade in the short and medium terms.Significant progress has been made towards adopting revised standards on the origin of traded goods the new and revised version of the Convention on Simplification and harmonisation of Customs Procedures (Kyoto Convention) standards for applying the Code to assess the value of goods in customs according to transaction value criteria the ongoing amendments under the Harmonized commodity Description and Coding System and the application of new information and communications technology.All these customs instruments are essential complements for facilitating and expanding trade in our countries. E. Port actions for port development 36. Port reforms. The port sector in the region has exhibited change, but in different ways and to different degrees in each country . by and large speaking, the sector has been regulated and national port policies set, which in many cases had been absent. State monopolies in port operation and administration have been revised, by either totally or partially de rallyizing port activity to local anesthetic governments and/or applying the private sector concessions.Labor constraints have been overcome, and port authorities have therefore been playing a different role. This new environment is reflected in the revision of port tariffs, seeking to develop a more efficient, more flexible port system that is swifter, safer, and cheaper. The experts attending this event will more clearly and objectively illustrate how port systems operate in different countries in the Hemisphere. 37.I would like to reaffirm that, port reforms must be sped up for greater port efficiency and competitiveness, particularly in countries that have not yet do so, regardless of the ownership model the governments decide to adopt, since intern ational trade will not wait, and the countries growth and development can not be put off because of undefined policy. Delaying this reform will only result in higher social costs in the medium term. While it is important to define a port system be it public, private, or a combination of the two it is essential to have the instrument and facilities or achieving levels of efficiency to be able to adapt to the requirements of world trade and compete successfully. Landlord ports are the most common arrangements in the region. That is where port authorities cease to serve as port operator, provide the necessary infrastructure, and grant concessions to the private sector to operate complementary services and terminals. Generally, in this situation, the central government grants financing to the sector, such as direct subsidies and credit guarantees. In general, this model promotes higher-quality service delivery. 38.The impact of ports on promoting national economic development. This i s another consideration that I would like to reiterate, with a few examples of what is being done in other developing countries that have made progress in port reform. These countries have concessionaires and private terminal operators and have been adversely affected by the various financial crises. Their development strategy also depends heavy on exports. However, strategic development plans and specific recommendations are in place to strengthen the role of the port sector to ensure significant recovery of the national economy.They include (i) operators reviewing their operating costs to eliminate unnecessary expenditures (ii) enhancing the efficiency and productivity of port operations, particularly by shortening the time essential for container movement by crane or using more cranes for ships with higher cargo volume and employing information and communications technology in routine operations, bearing in mind the growing volume of cargo being moved and the corresponding vol ume of communications that must be penalize (iii) conducting more aggressive marketing campaigns to raise the volume of cargo sent directly from the countrys ports to its final destination (iv) implementing infrastructure projects aimed at raising port capacity in the medium term (v) conducting equipment and port facility maintenance campaigns to continue to ensure efficient operations and (vi) continually revising the role of port authorities to cover changes in the market. In light of these reforms, their role is focused on planning and regulating port activity, facilitating the transport chain, controlling and supervising the activities of private enterprises by developing information systems, and promoting and working with the port community and foreign and international institutions. 39.Take into account trends and developments in the maritime industry and port operators in order to adjust port development strategies to the world challenges of this century. (i) Global port ope rators will continue to expand to new geographic areas and will maximize the use of technology to stimulate worldwide port networks that can offer consistent levels of services and modes of operation. more alliances will be forged among port terminal operators to promote economies of scale and use of global capacity. (ii) Since capital investments will be high, only the most powerful enterprises with significant financial resources will remain in these alliances. iii) Port facilities will acquire new and better standards and advanced technology in order to serve mega ships. (iv) Container storage capacity must be ameliorate through new systems and new facility designs. (v) There will be significant investment in communications and information technology for a world run electronically. 40. Finally, partnership for development. This mechanism will be authoritative for the future of regional port activity, given the urgent need for information exchanges for decision-making in port operations on shipping companies and port operators, as well as on producing projects to be implemented jointly and collision market requirements in general. Bilateral and multilateral cooperation must increase.The Organization of American States (OAS) has an Inter-American charge on Ports (CIP) which serves as a forum for dialogue for the governments of all countries in the Americas and the port authorities, but also for port operators, shipping lines, and commercial, industrial, financial, academic, and scientific entities. Use of this mechanism is an effective, low-cost option for strengthening hemispheric cooperation among ports in the Americas and contributing to their development. Port forums, such as those offered by the Andean Committee of Water Transport Authorities (CAATA) and the Association of Caribbean States (ACS), among others, work along the same lines for cooperation and to achieve port efficiency, which our government authorities must use to the fullest. 41. Conc lusion. Ladies and gentlemen, my goal has been to provide you with up-to-date information on the ever-changing world of ports.What we are seeing in the worlds ports today we could never have envisioned 25 years ago, like 8,000-TEU megaships or ports with great capacity to move containers, such as the Port of Hong Kong with 16. 2 million TEUs per year. However, we a lot consider 25-year blocks in long-term investments in the maritime port industry. Changes in the industry in the next quarter of a century will be even more dizzying and spectacular, and our ports will have to adapt. 42. In this globalized world and in our corner of the world where 90% of our trade goes through ports, it is the office of the governments, operators, shipping companies, service providers, and workers to work together to support the development of both our ports and our economies. Lets forge an efficient, competitive inter-American alliance for the future of our ports CIP00106E